Franking Credit Formulas

How can I calculate Franking Credits?

We have provided examples on how to work out franking credits manually using formulas for both a fully franked and partially franked dividend.

Fully Franked Dividend Calculation

The formula to calculate franking credits (assuming they are 100% franked) is;

Franking Credits = (Dividend Amount / (1-Company Tax Rate)) – Dividend Amount

An example is below assuming a $70 dividend that is 100% franked;

Franking Credits = ($70 / (1 – 0.30)) – $70

= ($70 / 0.70) – $70

= $100 – $70

= $30

As the franking credits are worth $30 the total dividend grossed up including franking credits is $100.

What about partially franked?

To easy we do the same calculation but adjust the answer.  If the dividend above was only 50% franked we simply adjust the franking credit by the percentage

Franking Credits at 100%  = $30

Franking Credits at 50%    = $30 * 0.5

= $15

In this partial franked example the grossed up dividend would only be $85 as the dividend was only 50% franked instead of 100% franked.

Do you have an Online Franking Credit Calculator I Can Use?

Yes, use our online franking credit calculator.